All Forum Posts by: Gert Dervishaj

Hi @Jason, Is that finished cost per sqft? Or cost for the bones (framing, roofing, siding, foundation, etc)? I am speaking with modular builders as well but it has been difficult to get some numbers. I know cost of lumber is way up so prices have climbed too.

Hello,
I am thinking of getting in single family home new construction since an opportunity has come my way. But I am having trouble finding good sources of info for my area specifically. If anyone is from MA, specifically Worcester county, what are the costs I will need to consider to build a 2000-2250 sq ft home? I know that costs vary in terms of construction from site prep  to utilities (or lack thereof) to finish work, etc, but is there a good rule of thumb I can work off of? If not, how do builders estimate cost of building? Also, does anyone have any opinions on modular vs stick built? 
Thanks in advance!

Thanks for the advice @Mark H. Porter!! We are having someone come out to provide a quote tomorrow which is great. The other concern now is that because of this parlor heater, closing is going to be pushed back. If the seller can't meet their end of the contract and pushes back the closing, are there consequences for the seller. Can we argue that he would have lost rental revenue because the seller could not close on time?

Hello BiggerPockets, 

My younger brother is under contract for a 4-Fam in Webster, Mass and he is buying through a conventional loan with 5% down since it is his first purchase. Before the inspection period, the seller/agent had told us they are going to complete the repairs on the 3rd and 4th unit. They were putting in new flooring, baseboard/door trim, new doors, and taking care of a live knob and tube wire in the basement. After the inspection, we noticed the 4th unit does not have a heating system and the seller agreed to install one. We have in writing on our P&S that the seller was going to "install a gas parlor heater" in the unit. I know those heaters are terrible but my brother had already planned to install a ductless/mini split system through Mass Save. The seller now wants to just credit us $3500 and not finish the flooring/trimwork and installing the heating system. I have also called the Building inspector in Webster and was told "as part of building code, that the chimney needs to be lined for gas heaters in old homes and that he would give anyone who is installing a gas parlor a hard time because those units are dangerous, especially to kids." The other problem is that no one in the area has wanted to install the parlor heater because of liabilities associated with it. They aren't even willing to provide paper quotes on the install. We have received soft quotes (verbal quotes) that the lining and heater install will cost at least $6500. The seller has not found anyone that could install the heater either. We are supposed to close on Friday and are all set on our side for financing, but the seller has not met the repairs side of the contract. Would we be able to negotiate for a full install of a better system like forced hot air or ductless/mini splits? What are the consequences for the seller if he can't/won't meet his end of the contract when we are ready?

Thanks for any advice!

Hi Eraldo, best advice I can give you is to listen to all of the bigger pockets podcasts while your finishing your contract and take advantage of a VA loan when your back. Things can certainly change over a year or so which is why you should this time now to learn the basics. Also, keep reading REI articles and learn from people mistakes on here. They are kind enough to explain what they learned from their deals and what to avoid, definitely take all of these nuggets of gold and just let it marinate until you are ready to take the plunge.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $360,000
Cash invested: $28,000

Found a sweet 4-family in Mass and purchased it FHA. I am now receiving ~60% ROI for year 1 and it's great!

What made you interested in investing in this type of deal?

Decided to purchase the house because it has an extra 1000 sq ft full height attic for an additional unit if the city approves it. And it has a 3.5 car garage for extra income! Can't wait for year 2!

How did you find this deal and how did you negotiate it?

I found it on the MLS and negotiated down 10k from asking from things found on the inspection.

How did you finance this deal?

FHA loan through a regular bank.

How did you add value to the deal?

Rents were under market and building needed some cosmetic updates. I renovated a few things on my own and increased rents to market levels depending on condition of unit. I also am giving tenants free wifi as a value add since I have a security system in place there.

What was the outcome?

Positive. I have an investment now where my net cash flow is more than my Mortgage (PITI), water, and utilities combined. I get to put half of that away for a rainy day and still profit $250/unit/month. 4 Families are definitely the way to go!

Lessons learned? Challenges?

I could've negotiated better, the whole needs new windows so I have to plan for an additional 13k expense this upcoming year or two. I should've gotten the seller to credit me the cost or asked to get them done prior.

I second what Brian said. Market is very inflated. I’m looking at surrounding towns near Worcester and getting much better returns and opportunities.

I have bid on properties in the past using 203k loans but have never succeeded in putting a property under contract. I have used Brett Malofsky in the past and he is great! Super knowledgable about the process and has done 203k before. I currently use him as my go to general contractor. Message me and I can send his contact info.

My parents and I both own multi family buildings. We have a combined total of 7 doors. We do our taxes separately but we’re curious if anyone knew a great CPA or tax person. I’ve looked online for some answers but don’t get a lot of good info. I’m hoping people here can provide their experiences and insight and references for this :)

Thanks in advance!!

-Gert

@Louis M Cocce Jr

I can’t take credit for anything of the things I’ve said. Have your son listen to all of the bigger pockets podcasts. I listen to them on every commute I have and when I walk my dog. The information you get from this community is awesome!! Feel free to contact me anytime. If your son really wants to do more real estate stuff, have him go to local meetups in his area or the area he is looking to buy in. Being around like minded people will make the process of buying a house easier.